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Starting a Staffing Agency: Finding Your Niche

Phil Cohen

Once you’ve decided to start a staffing agency, you must decide on what niche to focus on. By playing to your strengths and determining the needs of your location, you’ll be on your way to successful business ownership with growth on the horizon.

So, you’re thinking of starting a staffing company.

Once you’ve mapped out a plan for your temporary staffing company, it’s time to decide what part of the market you want to serve. You may decide, based on your location or the resources available to you, that you can effectively market a general staffing agency and fill the needs of every company with an opening.

However, doing so may lead to burn out or unsustainable growth. In addition, you may miss out on important industry information that can reduce the quality of your candidates and negatively impact your business relationships.

Niche staffing provides a variety of benefits to a new staffing company. Most importantly, it allows you to become an expert in your industry. By devoting all of your resources to one narrow field, you can stay on top of current news and information. Your knowledge of minute details, processes, and necessary certifications means you can select better candidates with more targeted skill sets.

Recruiting general administrative candidates may allow you to cast a wider net. Seeking executive assistants with scheduling experience and expertise in vendor management systems, on the other hand, will show your clients that you fully understand their needs and will build their confidence in your company. Companies in your niche will know they can come to you and will generate repeat business as they fill their open positions.

Another benefit of choosing a niche is limiting your competition. Instead of competing with every staffing agency in your service area, you need only distinguish yourself among those that provide a similar service. You can use your marketing resources more effectively if you do not spread them too thin.

How do you choose your niche?

If you decide to focus on a particular niche, you already have the tools on hand to decide what that niche should be:

Play to your strengths

If you have a wealth of experience in a certain industry, or you have an employee who does, consider making that your target niche. You will be ahead of the learning curve and you most likely already follow current trends.

Location, location, location

Where you plan to operate can make a difference. An area well known for its financial sector is not a good place for a construction staffing firm, but it is the perfect location for staffing financial professionals. Don’t be afraid to think outside the box on this one; our financial location could also be prime recruiting territory for specialized IT employees to keep the underlying systems operating smoothly.

Look for gaps in employment

What positions are companies in your area hiring for? If there is a common type of position in the Help Wanted section, you can quickly rise above the competition by recruiting the perfect candidates for those positions.

Be wary of competition 

Speaking of competition, try to stay away from heavily saturated niches. There are only so many mechanical engineering positions available, for example, and if you join 20 other mechanical engineering staffing firms in clamoring for those spots then you are setting yourself up for failure.

Make a list of all of these factors and see if any recurring themes arise. At the same time, look to your own passions and see if you can parlay them into a competitive proposition.

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There are, of course, some further ideas to consider:

Seek a balanced focus. If you focus too broadly, you risk failing to meet your client’s expectations. However, too specific a niche can diminish your client pool and make it completely impossible to place staff.

Position yourself for future growth. There is some guesswork involved here, but try to choose a field that is expected to grow in the coming years. As the industry grows, demand for your services will grow and, ideally, so will your bottom line.

Know what to charge. Some industries by nature pay better than others. You started a business to make money, so it would make sense to choose a niche that will yield higher fees.

Know where your candidates are. If you’re looking to find specific types of candidates, you need to know how to where to find them. Where would they look for open positions? Can you recruit them using LinkedIn, Facebook or other social media platform for recruitment? If yes, which platform is most worthwhile? Are your potential hires more likely to search for job openings on a mobile device? Understanding how to reach the top candidates in your specific niche is crucial to your success.

Don’t forget to download our free eBook with advice and ideas on how to start your own staffing company! 

Factor Finders provides payroll funding support to temporary staffing agencies in a variety of industries. Learn more about our factoring programs for staffing companies.

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Phil Cohen

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